tag:blogger.com,1999:blog-65407048964234002172024-02-20T05:33:47.722-08:00Account Adjustment BureauAnonymoushttp://www.blogger.com/profile/02140491243552099959noreply@blogger.comBlogger15125tag:blogger.com,1999:blog-6540704896423400217.post-8855314542280364212015-08-15T11:50:00.000-07:002015-08-15T11:50:21.944-07:00The Credit Department. You’re Paying for it Anyway – What Else Can It Do?<div align="center" class="MsoNormal" style="text-align: center;">
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Typically most credit departments are looked upon as a cost
center – only demonstrating their value when your customers begin to extend
your terms.<o:p></o:p></div>
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<br /></div>
<div class="MsoNormal">
Let’s look at what you actually have in a typical credit
department.<o:p></o:p></div>
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<br /></div>
<div class="MsoListParagraphCxSpFirst" style="mso-list: l0 level1 lfo1; text-indent: -18.0pt;">
<!--[if !supportLists]-->1.<span style="font-size: 7pt; font-stretch: normal;">
</span><!--[endif]--><b>Credit Manager</b> – could have formal training, but
not necessarily. Generally it is invaluable experience having been in the
position for several years and likely in several industries. <o:p></o:p></div>
<div class="MsoListParagraphCxSpMiddle" style="mso-list: l0 level1 lfo1; text-indent: -18.0pt;">
<!--[if !supportLists]-->2.<span style="font-size: 7pt; font-stretch: normal;">
</span><!--[endif]--><b>Credit Administrators</b> – one or more
credit-related staff either in “head office” or spread throughout your trading
area in branch offices, often very familiar with the local business scene. <o:p></o:p></div>
<div class="MsoListParagraphCxSpMiddle" style="mso-list: l0 level1 lfo1; text-indent: -18.0pt;">
<!--[if !supportLists]-->3.<span style="font-size: 7pt; font-stretch: normal;">
</span><!--[endif]--><b>Sales Manager</b> – at first this position may seem
counter-intuitive as part of the credit team; however they are the key customer-facing
people. <o:p></o:p></div>
<div class="MsoListParagraphCxSpLast" style="mso-list: l0 level1 lfo1; text-indent: -18.0pt;">
<!--[if !supportLists]-->4.<span style="font-size: 7pt; font-stretch: normal;">
</span><!--[endif]--><b>Accounts Receivable Clerks</b> – these are the men
and women who work with your slow-paying customers. Often these people gather
valuable market intelligence as it relates to your industry and that of your customer
base. Given proper attention, these people can become fantastic
negotiators. <o:p></o:p></div>
<div class="MsoListParagraphCxSpLast" style="mso-list: l0 level1 lfo1; text-indent: -18.0pt;">
<br /></div>
<div class="MsoNormal">
So we have a risk management professional with great “street
smarts”. A team of local “detectives” familiar with your customers’ geographic
location. A rainmaker that understands the value of getting paid; and finally a
group of “hands-on” negotiators whose job is to listen to the customer and
understand what is really going on. <o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div align="center" class="MsoNormal" style="text-align: center;">
<u><b>What Else Could
They Do for Me?</b><o:p></o:p></u></div>
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<br /></div>
<div class="MsoNormal">
The cost of sales is ever increasing, especially when it
comes to a face to face meeting, so it becomes vital to determine the
profitability of bringing a customer on board before you consummate the deal.
Have your credit team develop a list of prospective customers for you ranked by
credit quality. No sense chasing a potential customer if they pay too slow or
not at all.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
Invite your credit team into a marketing meeting. Solicit
their feedback with respect to the various customers and geographic factors. You
may be shocked at the market intelligence you have already paid for!<o:p></o:p></div>
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<br /></div>
<div class="MsoNormal">
Vendor contracts like leases can often turn into nightmares
that you are locked into for an unreasonable time frame. Use your Credit Manager
to take a preliminary review of contracts you are considering. The Credit
Managers' risk management skills will prove invaluable – pointing out clauses
that you may have overlooked and helping you to avoid personal liability. Sometimes the best deal is no deal.<o:p></o:p></div>
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Finally, encourage your Sales Manager to foster good
relations with your credit team, ensuring that all sales representatives and
credit staff get to know each other really well and on a personal level.
Together your sales and credit personnel form a formidable team of profit
generators.<o:p></o:p></div>
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<br /></div>
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<u><b>I Know That
Already</b><o:p></o:p></u></div>
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<br /></div>
<div class="MsoNormal">
Many of you are saying “I know all that already” and
thinking how will I get the last minute of my life back after reading this far?<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
Have you considered building your business through
acquisition? What about opening a new location? Maybe you’re considering
selling your business? Or perhaps you are contemplating a new software system
for your business. <o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<br />
<div class="MsoNormal">
In all of these cases
and many more – you would do well to engage your credit team early. Avoid
paying too much for your acquisition targets' receivables. Gathering market intelligence
of that prospective branch office trading area. Getting your receivable team to bring your
Days Sales Outstanding (DSO) well into your industries acceptable norms. Be an
attractive purchase. And finally, make absolutely certain that your new
whiz-bang software actually gives your Credit Department all the tools they
need to get the job done. </div>
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<br /></div>
<div class="MsoNormal">
The faster and more efficient the credit team is –
the better will be your margins, cash-flow, and most importantly your
customer satisfaction and staff morale level. <o:p></o:p></div>
Anonymoushttp://www.blogger.com/profile/02140491243552099959noreply@blogger.com0tag:blogger.com,1999:blog-6540704896423400217.post-65642977734828518732015-07-17T09:34:00.003-07:002015-07-17T09:34:47.930-07:00Top 10 Steps to Making Powerful Commercial Collection Calls<div align="center" class="MsoNormal" style="text-align: center;">
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Over the last ten years, the number one topic requested at
our credit seminars is “how to make an effective collection call.” The best
medium for this still remains the telephone; however just picking up the phone
is not good enough. If you don’t have a predetermined strategy in place, you’re
probably spinning your wheels – being ineffective and costing your company
money. </div>
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<br /></div>
<div class="MsoNormal" style="text-align: center;">
<b>So how do you improve? </b><o:p></o:p></div>
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<br /></div>
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Here are the top ten steps you can take right now:<o:p></o:p></div>
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<br /></div>
<div class="MsoListParagraphCxSpFirst" style="mso-list: l0 level1 lfo1; text-indent: -18.0pt;">
<!--[if !supportLists]-->1.<span style="font-size: 7pt; font-stretch: normal;">
</span><!--[endif]-->Know your customer and their business. Are they
impacted by seasonal cash flow etc.? <o:p></o:p></div>
<div class="MsoListParagraphCxSpMiddle" style="mso-list: l0 level1 lfo1; text-indent: -18.0pt;">
<!--[if !supportLists]-->2.<span style="font-size: 7pt; font-stretch: normal;">
</span><!--[endif]-->Deciding what strategies you will use to stay on
track.<o:p></o:p></div>
<div class="MsoListParagraphCxSpMiddle" style="mso-list: l0 level1 lfo1; text-indent: -18.0pt;">
<!--[if !supportLists]-->3.<span style="font-size: 7pt; font-stretch: normal;">
</span><!--[endif]-->Set goals for yourself. For example – reduce DSO
by 12% to improve cash flow.<o:p></o:p></div>
<div class="MsoListParagraphCxSpMiddle" style="mso-list: l0 level1 lfo1; text-indent: -18.0pt;">
<!--[if !supportLists]-->4.<span style="font-size: 7pt; font-stretch: normal;">
</span><!--[endif]-->Deciding and outlining which strategies you will
use to achieve its goals.<o:p></o:p></div>
<div class="MsoListParagraphCxSpMiddle" style="mso-list: l0 level1 lfo1; text-indent: -18.0pt;">
<!--[if !supportLists]-->5.<span style="font-size: 7pt; font-stretch: normal;">
</span><!--[endif]-->Create effective call scripts so the
conversation flows well and you can effectively manage objections and/or stall
tactics. <o:p></o:p></div>
<div class="MsoListParagraphCxSpMiddle" style="mso-list: l0 level1 lfo1; text-indent: -18.0pt;">
<!--[if !supportLists]-->6.<span style="font-size: 7pt; font-stretch: normal;">
</span><!--[endif]-->Measure your results to see what works and what
does not. Establish key performance indicators (KPI) to help benchmark future
results/ activities.<o:p></o:p></div>
<div class="MsoListParagraphCxSpMiddle" style="mso-list: l0 level1 lfo1; text-indent: -18.0pt;">
<!--[if !supportLists]-->7.<span style="font-size: 7pt; font-stretch: normal;">
</span><!--[endif]-->Make detailed notes of your conversations with
your customers. Before hanging up the phone – provide the customer of a recap
of your understanding of the conversation. Better to catch misunderstandings
now.<o:p></o:p></div>
<div class="MsoListParagraphCxSpMiddle" style="mso-list: l0 level1 lfo1; text-indent: -18.0pt;">
<!--[if !supportLists]-->8.<span style="font-size: 7pt; font-stretch: normal;">
</span><!--[endif]-->Try to establish quickly if the customer is slow
paying because of a dispute or cash flow issues. You can increase customer
satisfaction by simply listening. If there is a legitimate dispute – deal with
it. If it is a cash flow problem – see if you can work with the customer.<o:p></o:p></div>
<div class="MsoListParagraphCxSpMiddle" style="mso-list: l0 level1 lfo1; text-indent: -18.0pt;">
<!--[if !supportLists]-->9.<span style="font-size: 7pt; font-stretch: normal;">
</span><!--[endif]-->Be decisive. If you are getting many promises
but no meaningful action (money) then consider bringing in a professional
collection agency or lawyer. If you don’t follow through – your customer will
take advantage of you.<o:p></o:p></div>
<br />
<div class="MsoListParagraphCxSpLast" style="mso-list: l0 level1 lfo1; text-indent: -18.0pt;">
<!--[if !supportLists]-->10.<span style="font-size: 7pt; font-stretch: normal;">
</span><!--[endif]-->Consistency is key. Consistent follow up –
consistency doing what you say you’re going to do. Customers (and your boss<span style="font-family: Wingdings; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-char-type: symbol; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin; mso-symbol-font-family: Wingdings;">J</span>) will soon learn that
your invoices get paid before others. <o:p></o:p></div>
Anonymoushttp://www.blogger.com/profile/02140491243552099959noreply@blogger.com0tag:blogger.com,1999:blog-6540704896423400217.post-12402929899499294062015-07-14T15:08:00.001-07:002015-07-14T15:08:26.778-07:00My Most Satisfying War Story<div class="MsoNormal">
Early
in my career as a commercial collector, I had a small local printing company as
a customer. I had met the owner, Bernie, at a local Chamber of Commerce
function earlier that week. It was a Thursday when I received a panicked call
from Bernie explaining that his largest order had bounced a check for
$18,000.00 and he was counting on the funds to make payroll the following
Tuesday. </div>
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<br /></div>
<div class="MsoNormal">
I drove to Bernie’s office and had a look at the check. It was drawn
on a bank two time zones a head so I couldn’t simply drive over to the bank and
certify the item. I asked Bernie if his customer was offering to replace the
check and he said yes, but only $5,000.00 and it would have to be the
following week because they had cash flow issues of their own. <o:p></o:p></div>
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<br /></div>
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As any
business owner can relate, Bernie was elated to finally land his biggest order
to date. It wasn’t a simple printing job either. It was individually numbered
and perforated lottery tickets. The order was a rush and Bernie and his team
worked extra hours to get the order shipped on time. In fact, Bernie had paid
extra to source special paper stock from his suppliers to complete the job.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
I took
the check anyway and drove back to the office. Upon contact with the debtor
firm, we got the same story as Bernie had received.</div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<o:p></o:p></div>
<div align="center" class="MsoNormal" style="text-align: center;">
<b>It Was 2:00 PM</b><o:p></o:p></div>
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<br /></div>
<div class="MsoNormal">
It was
2:00 PM on a Thursday. Almost as an
afterthought, we called the bank to see if there were sufficient funds on deposit
and we learned that YES!! there was. I immediately couriered the check to the
bank to arrive overnight for next day certification. We received the check back certified on the following Monday. Our firm deposited the funds into our
trust account and the issued a special check run so Bernie could access his
money in the time to meet his payroll. <o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
Bottom-line? Bernie
meets his payroll – staff paid their bills and feed children not knowing how
close they were to big problems.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<br />
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Today,
almost 30 years later, Bernie’s firm is thriving and has grown considerably.
Bernie has learned many practical tips and techniques to manage his cash flow;
however he still likes to tell our story with pride. <o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal" style="text-align: center;">
<b>I Love This Business</b></div>
Anonymoushttp://www.blogger.com/profile/02140491243552099959noreply@blogger.com0tag:blogger.com,1999:blog-6540704896423400217.post-23394321059966421242014-09-12T16:53:00.000-07:002014-09-12T16:53:16.282-07:00Dialing For Dollars – On Steroids!<div class="MsoNormal">
The accounts receivable department is a very busy place –
processing credit applications, limit increase requests, sales inquiries,
processing and posting payments, and of course making collection calls. If your
list of customers on your Aged Trial Balance is quite large, you may never get
to the end of your customer call list before its time for another month end. <o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal" style="text-align: center;">
<b>If This Sounds Like You – You’re Not Alone.</b><o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
Many credit professionals have the same challenges. If the
customer were to call, you could find the time to talk; however the reality is
that the smaller balances do not get the same treatment as the larger ones. One
solution could be to hire another credit analyst to make those calls if you
have the time to train and budget for it.
Another common option, if your system allows for it, is to send your
customer a system generated demand letter. <o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal" style="text-align: center;">
<b>No Extra H/R Budget? Here’s a Cost Effective Option</b><o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
If your system is capable of exporting customer data such as
telephone numbers, customer account number, and customer name, we can create an
automated telephone call campaign using a custom pre-recorded message.
Thousands of calls can be completed each day. The message asks your customer to
call your office or they have the option of speaking to a live operator at your
company. You maintain complete control of the customer experience with all
funds directed to your office.<o:p></o:p></div>
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<br /></div>
<div class="MsoNormal" style="text-align: center;">
<b>Bottom Line</b><o:p></o:p></div>
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<br /></div>
<div class="MsoNormal">
Custom calling campaigns have produced some amazing results.
Clients report a payment in full rate of up to 50% for much less than the cost
of another employee. Sales Managers report increased sales as a result of old
accounts being resolved. And customer satisfaction results actually improve as
customer issues are getting solved. <o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
If you are interested
in deciding if custom calling campaigns are right for your business – give us a
call today for a free review. <o:p></o:p></div>
<br />
<div class="MsoNormal">
1-866-266-0117 Ext. 350<o:p></o:p></div>
Anonymoushttp://www.blogger.com/profile/02140491243552099959noreply@blogger.com0tag:blogger.com,1999:blog-6540704896423400217.post-62803636816217820112014-09-08T09:14:00.000-07:002014-09-08T09:14:11.419-07:00Recovering Your Collection Fees<div class="MsoNormal">
To be able to recover your collection costs from a
commercial debtor in the United States, you must have a valid signed agreement whereby the
debtor has agreed specifically that the costs of collection are recoverable. </div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
A version of this clause may look something
like this:</div>
<div class="MsoNormal">
<o:p></o:p></div>
<div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<i><span style="font-family: Times New Roman, serif; font-size: small;">“The customer shall pay all </span><em><span style="font-family: Times New Roman, serif; font-size: small;">solicitor's
fees and expenses, and all legal costs as between solicitor and his own client
on a full indemnity basis, as well as an allowance for the time, work and
expenses of the Credit Grantor, or of any agent, solicitor or employee of the
Credit Grantor, for any purpose herein provided for and whether such sums are
advanced or incurred with the knowledge, consent, concurrence or acquiescence of
the Customer or otherwise, together with interest thereon at the rate provided
for herein, shall be repayable to the Credit Grantor on demand, or if not
demanded then with the next ensuing </span><span style="font-family: Times New Roman, serif;">installment</span><span style="font-family: Times New Roman, serif; font-size: small;"> payable to the Credit Grantor</span></em></i><em><span style="font-size: 12.0pt; font-style: normal; mso-bidi-font-style: italic;">.”<o:p></o:p></span></em></div>
<div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<br /></div>
<div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<br /></div>
<div class="MsoNormal">
Where these costs are recoverable, often the courts decline
to add the total amount of the collection costs and/or contingent fees in the
event you decide to sue your customer.<o:p></o:p></div>
<div class="MsoNormal">
Funds paid for court filing fees, service of documents,
etc. are legally recoverable are added to the final judgment amount. <o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal" style="text-align: center;">
<b>The Reality of
Recovering Collection Costs<o:p></o:p></b></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
Notwithstanding the legalities, what are the chances of
recovering collection costs from your slow-paying customer?<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
As with any business transaction, if you have a signed
agreement where the customer has agreed to your terms and conditions, the
chances are more favorable than if you do not.
Sometimes it may take court action to facilitate the recovery of
collection fees. It is only possible to
enforce a legal contract through the courts.
Reputable and ethical collection professionals will not visit a debtors
business premises to force payment of the collection fees.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
At AAB, our approach is to recover all principal and
interest charges on an amicable basis.
If the creditors agreement with its customer contains the required
clauses to hold the debtor company liable for collection fees, then we will
work to obtain those expenses as well.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
Should your customer balk at paying these fees, they may be
used as a negotiating tool to encourage prompt remittance of the principal
amount of the debt.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<br />
<div class="MsoNormal">
When pressed, some debtors will agree to pay the interest
expense, especially if they want to work with the creditor again in the future;
however if there is no signed agreement to pay interest or collection expenses,
the debtor will not pay them.<o:p></o:p></div>
Anonymoushttp://www.blogger.com/profile/02140491243552099959noreply@blogger.com0tag:blogger.com,1999:blog-6540704896423400217.post-60802139755896954672014-09-04T18:00:00.003-07:002014-09-04T18:00:48.753-07:00How to Hire Top Shelf Credit Staff<div class="MsoNormal">
In most small and medium sized companies the accounts
receivable clerk was recruited from the accounting department and got the job
by accident. If you were to ask these credit clerks if they actually enjoy
their work – most will answer with a resounding NO! Employee turnover in this
position is extremely high.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div align="center" class="MsoNormal" style="text-align: center;">
<b>Low Job Engagement =
Big Problems</b><o:p></o:p></div>
<div align="center" class="MsoNormal" style="text-align: center;">
<br /></div>
<div class="MsoNormal">
If you check out the help wanted ads they are chock-full of
employers looking for credit and collection personnel. We regularly see
advertisements for the same companies every month. Turnover in any employee
position is expensive; however the turnover of credit and collection staff can
be exponentially more expensive if not caught and corrected right away. <o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div align="center" class="MsoNormal" style="text-align: center;">
<b>Untrained Staff
Managing Your Largest Asset?</b><o:p></o:p></div>
<div align="center" class="MsoNormal" style="text-align: center;">
<br /></div>
<div class="MsoNormal">
So how do you attract and retain quality credit &
collection staff? It all starts with your advertisement. Workopolis, Monster and
Career-Builder are popular help wanted sites. Firms like Robert Half and Mercer
Bradley can help you with recruiting as well. Increasingly sites like Craigslist
and Kijiji have become excellent sites to post your advertisements. <o:p></o:p></div>
<div class="MsoNormal">
Your advertisement is critical. Be specific about the job
expectations. Post the salary or the hourly wage. Let people know exactly what
they can expect. Pre-qualify candidates to make sure they possess the qualities
of top credit and collection professionals.
There are several pre-employment tests that can be administered to help you
short-list candidates for this specific position.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div align="center" class="MsoNormal" style="text-align: center;">
<b>Ounce of Prevention
vs. Pound of Cure</b><o:p></o:p></div>
<div align="center" class="MsoNormal" style="text-align: center;">
<br /></div>
<div class="MsoNormal">
Once you have posted your advertisement, pre-qualified your
candidates, and given thoughtful consideration to the job requirements – you
are ready to make an employment offer. Attracting and retaining the right
credit and collection personnel is critical to your firm’s financial success.
Don’t leave it to chance otherwise you can expect the same results with your
accounts receivables. <o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div align="center" class="MsoNormal" style="text-align: center;">
<b>Need Help? No Time?</b><o:p></o:p></div>
<div align="center" class="MsoNormal" style="text-align: center;">
<br /></div>
<div class="MsoNormal">
If you know you need help with your accounts receivable, we
can help you draft an advertisement, test candidates and provide you with a
short-list of people that actually want to work in credit and collections.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<br />
<div class="MsoNormal">
Call us today at
1-866-448-3936 for a free consultation and don’t leave your financial results
to chance. <o:p></o:p></div>
Anonymoushttp://www.blogger.com/profile/02140491243552099959noreply@blogger.com0tag:blogger.com,1999:blog-6540704896423400217.post-3489855082441158262014-05-11T09:01:00.001-07:002014-05-11T09:01:34.766-07:00Cash Flow Is King<div class="MsoNormal" style="text-align: left;">
The number one mandate of any business is to survive. This
mandate supersedes any other. An
organization must generate enough cash flow to meet its obligation such as
payroll, taxes, and payment to trade suppliers and avoid being insolvent.</div>
<div align="center" class="MsoNormal" style="text-align: center;">
<br /></div>
<div class="MsoNormal">
<o:p></o:p></div>
<div class="MsoNormal">
During negotiations with many debtor companies, the #1 response we typically hear is “We had tons of orders- I don’t understand
why I’m in trouble”. These “successful”
business people become insolvent because they simply didn't have enough cash to
meet operating expenses, including the added cash requirement that increased
sales generates. Without adequate cash planning these debtor companies were not
capable of meeting payroll and the purchase of raw materials to meet the sales
demand.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
With any business the cash cycle looks like this:<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
Cash is used to
buy raw materials or pay for services rendered in the production of the final
product or service. The sale of the goods or services produces cash and
accounts receivables. When customers pay their bills, the accounts receivable
goes down and the bank balance increases. Unfortunately the cash doesn't
usually come in the same month as the sales generates. <o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
If a business finds itself short of cash, the options are:<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoListParagraphCxSpFirst" style="mso-list: l0 level1 lfo1; text-align: justify; text-indent: -18.0pt;">
</div>
<ul>
<li><span style="text-indent: -18pt;"> The
owner can inject more cash into the business.</span></li>
<li><span style="text-indent: -18pt;"> The
business can use a pre-existing bank line of credit.</span></li>
<li><span style="text-indent: -18pt;"> The
business can slow its payments to trade suppliers.</span></li>
<li><span style="text-indent: -18pt;"> Sale
of fixed assets.</span></li>
<li><span style="font-size: 7pt; text-indent: -18pt;"> </span><span style="text-indent: -18pt;">Sale
of non-current inventory.</span></li>
<li><span style="font-size: 7pt; text-indent: -18pt;"> </span><span style="text-indent: -18pt;">Issuance
of company stock.</span></li>
</ul>
<o:p></o:p><br />
<div class="MsoListParagraphCxSpMiddle" style="mso-list: l0 level1 lfo1; text-align: justify; text-indent: -18.0pt;">
<o:p></o:p></div>
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<o:p></o:p></div>
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<o:p></o:p></div>
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<o:p></o:p></div>
<div class="MsoListParagraphCxSpLast" style="mso-list: l0 level1 lfo1; text-align: justify; text-indent: -18.0pt;">
<o:p></o:p></div>
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<br /></div>
<div class="MsoNormal" style="text-align: justify;">
One of the easiest methods of
raising some fast cash flow is to ensure you are collecting money from your
credit customers in a timely matter. Your collection efforts should include a
systematic and consistent follow-up. This is vital to the establishment in the
credibility of your credit terms in the minds of your customers. Time is of the
essence when credit and collections are concerned. To be effective one must
follow-up diligently. An accurate, timely report of your aged trial balances is
crucial to the efficient control of collections and release of new orders. <o:p></o:p></div>
<div class="MsoNormal" style="text-align: justify;">
<br /></div>
<br />
<div class="MsoNormal" style="text-align: justify;">
Putting a customer’s order on
credit hold is an excellent way to get their attention. Prompt contact with
your customer in a professional, tactful manner usually produces the desired
effect. Make sure you respond quickly when your customer pays his account to
make sure there are no delays with their next order. <o:p></o:p></div>
Anonymoushttp://www.blogger.com/profile/02140491243552099959noreply@blogger.com0tag:blogger.com,1999:blog-6540704896423400217.post-50769982837777574082014-04-04T09:37:00.000-07:002014-04-04T09:37:24.211-07:00Trust - But Verify<h3 style="text-align: center;">
<b>The Value of Validating Your Customer & Supply Chain </b></h3>
<div class="MsoNormal" style="text-align: center;">
<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
The phrase “Trust-But Verify” comes from an old Russian proverb. Ironically in the 1980’s it was a favorite mantra of Ronald Reagan. Wikipedia defines it as: <i>a form of advice given which recommends that, while a source of information might be considered reliable, one should perform additional research to verify that such information is accurate, or trustworthy</i>.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
Back when I was a kid and just got into the receivable management business, I had a boss that used this phrase all the time – and it drove me nuts! Today we have staff in two countries and thousands of clients and can now tell you unequivocally that he was right. Trust your customer but don’t be naïve. Trust the information on the new credit application but complete your due diligence check list anyways.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<h4 style="text-align: center;">
<b>It’s All About Risk Management</b></h4>
<div class="MsoNormal" style="text-align: center;">
<o:p></o:p></div>
<div class="MsoNormal" style="text-align: center;">
<b><br /></b></div>
<div class="MsoNormal">
Trusting your customer and vendors is important in business. Validating that your customer and vendors are capable of fulfilling their obligations is of equal importance – maybe even more so.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<h4 style="text-align: center;">
<b> So How Do I Trust But Verify?</b></h4>
<div class="MsoNormal" style="text-align: center;">
<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
There are many ways to satisfy yourself that your client and vendors are capable of doing good consistent business with you. If possible, we recommend visiting your customer or vendors place of business where practical. Have a look around. Is the yard busy? Does the stock on the shelves look current? What’s happening at their loading dock? Do the employees look busy? Are the phones ringing?<o:p></o:p></div>
<div class="MsoNormal">
All these indications are good signs of the level of activity that your client or vendor is operating as a going concern.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<h4 style="text-align: center;">
<b>What If You Can’t Visit?</b></h4>
<div class="MsoNormal" style="text-align: center;">
<o:p></o:p></div>
<div class="MsoNormal" style="text-align: center;">
<b><br /></b></div>
<div class="MsoNormal">
If the physical location of your client or vendor makes it impractical to do a premise visit, we recommend retaining the services of a credit investigation firm that maintains the ability to obtain information not readily available. They should have access to corporate records, land titles or deed information. They should have access to construction project data. Additionally they ought to maintain the capability of performing reference checks on trade suppliers and obtaining a bank check. It should be simple to use an investigation firm. Look for a vendor that provides online access and is equally easy to call on the phone.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<h4 style="text-align: center;">
<b>Surprises are for Birthday Parties – Not Your Business</b></h4>
<div class="MsoNormal" style="text-align: center;">
<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
In negotiations, information is power. Access to reliable current data on your customer and supply chain will help you to plan and source alternate suppliers if appropriate. Don’t get caught with no place to sit when the music stops.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<br /></div>
<br />
<div class="MsoNormal">
About the author: Brad Lohner is a Director of the PCR Group of Companies which owns <a href="http://prioritycredit.ca/" target="_blank">Priority Credit Recovery</a>, a Canadian commercial collection agency and <a href="http://www.accountadjustment.us/index.php" target="_blank">AccountAdjustment Bureau, Inc</a>., an American commercial agency. The PCR Group also consists of <a href="http://lien-pro.com/" target="_blank">Lien-Pro</a> – Canada’s only Construction and Builders lien filing firm, and <a href="http://creditprocessadvisors.com/" target="_blank">Credit Process Advisors</a> – a strategic credit management and accounts receivable outsourcing firm. Priority Credit Recovery and Account Adjustment Bureau are authorized agents of <a href="http://www.lumbermen.com/" target="_blank">Lumbermen’s Credit Group</a>, a construction and mercantile credit bureau with access to data throughout North America. </div>
Anonymoushttp://www.blogger.com/profile/02140491243552099959noreply@blogger.com0tag:blogger.com,1999:blog-6540704896423400217.post-4924291454946549472014-03-08T05:58:00.000-08:002014-03-08T05:58:20.527-08:00Staying Out of The DoghouseIn the receivable management world, we see the good, bad and ugly of both business and human relations. While we have touched on this topic before. we believe it is a good time for another review. Let's review the secret to good business.<br />
<br />
When I was a kid, my dad had a saying whenever I got into trouble. He would say “What are you in the doghouse for this time?” As we work through our clients disputed receivables and consult with prospective clients, my dad’s question still rings in my head. Approximately 40% of the cases assigned to our firm in the last 24 months have not been a result of the customers inability to pay, but rather a dispute with delivery, quality, supply chain disruption, unfulfilled promises...and the list goes on. In these situations our firm acts more as a mediator than professional debt collector.<br />
<br />
There is a way for creditors and their customer to stay “stay out of the doghouse” and that is to not be afraid of tough conversations. Addressing tough issues head on without your pride or ego getting in the way is difficult. For some, admitting mistakes is tough. Creating an environment where staff and customers can fess up to mistakes can be equally challenging. Trusting your boss to not crucify you for making a mistake can be tough.<br />
<br />
<div style="text-align: center;">
<b><u>So What Do You Do?</u></b></div>
<br />
A young Jewish man was once quoted by his friend John as saying “… the truth shall make you free.” As was true over 2000 years ago – the same is true today. Phone your supplier or customer and admit you screwed up. While the recipient may not like the message initially, they will come to respect you for admitting the mistake.<br />
<br />
Taking this approach will accomplish two things:<br />
<br />
1) Position yourself as a person or company of integrity, and/or;<br />
2) Establishing yourself as someone who can be trusted during a difficult negotiation.<br />
<br />
<div style="text-align: center;">
<b><u>Managing Expectations</u></b></div>
<br />
The best way to position yourself as a person or company of integrity is to talk about the “tough stuff” up front. As mentioned earlier, if everyone did this, 40% less receivables would end up in third-party collections and business relations may be stronger than ever! The best way to minimize these troubles is to do your due diligence on your vendor supply chain and customers at least once each year. Check their credit rating, review their warranty claims, review their track records.<br />
<br />
<br />
If you need assistance with the due diligence process contact our business partner <a href="http://creditprocessadvisors.com/creditscreening.php" target="_blank">Credit Process Advisors Inc.</a> to obtain information such as credit information, bank checks, Mechanics Lien information, law suits, and receivable monitoring.Anonymoushttp://www.blogger.com/profile/02140491243552099959noreply@blogger.com0tag:blogger.com,1999:blog-6540704896423400217.post-33663229355779227222014-02-13T14:19:00.002-08:002014-02-13T14:19:18.364-08:00Managing Your Receivables for Top Performance<div class="MsoNormal">
There are certain key performance indicators (KPI’s) that any business can implement to significantly increase its odds of not only surviving but help it to thrive.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
Each segment of your business, including your credit department, should have its own sub-set of KPI’s to ensure your cash flow is optimized while managing costs. <o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
Here are the compelling reasons to carefully manage your accounts receivable:<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoListParagraphCxSpFirst" style="text-indent: -18pt;">
</div>
<ul>
<li><span style="font-family: Symbol; text-indent: -18pt;"><span style="font-family: 'Times New Roman'; font-size: 7pt;"> </span></span><span style="text-indent: -18pt;">If one maintains a systematic method of managing accounts between 30-60 days past due, you should see an 85% reduction in accounts aging past 60 days.</span></li>
<li><span style="font-family: Symbol; text-indent: -18pt;"><span style="font-family: 'Times New Roman'; font-size: 7pt;"> </span></span><span style="text-indent: -18pt;">After 60 days, the probability of collecting your account is 80%, at 90+ days, it slides to just 70%</span></li>
<li><span style="text-indent: -18pt;">If allowed to age past 90 to 180 days, the chances of a full recovery are now 54%!</span></li>
</ul>
<br />
<div class="MsoListParagraphCxSpMiddle" style="text-indent: -18pt;">
<o:p></o:p></div>
<div class="MsoListParagraphCxSpLast" style="text-indent: -18pt;">
<o:p></o:p></div>
<div class="MsoNormal" style="text-align: center;">
<b>So what steps can you take to maintain control of your receivables?</b><o:p></o:p></div>
<div class="MsoNormal" style="text-align: justify;">
<br /></div>
<div class="MsoListParagraphCxSpFirst" style="text-align: justify; text-indent: -18pt;">
<span style="text-indent: -18pt;"><b> Know Your Customer </b>- Paretto’s Principle holds true in most companies that 80% of your revenue is generated by 20% of your customers. Segment your customers by assigning codes. For example:</span><o:p></o:p></div>
<div class="MsoListParagraphCxSpFirst" style="text-align: justify; text-indent: -18pt;">
<span style="text-indent: -18pt;"><br /></span></div>
<div class="MsoListParagraphCxSpMiddle" style="margin-left: 108pt; text-align: justify; text-indent: -18pt;">
A.<span style="font-size: 7pt;"> </span>Best customers, great margins, pays within terms, few service issues.<o:p></o:p></div>
<div class="MsoListParagraphCxSpMiddle" style="margin-left: 108pt; text-align: justify; text-indent: -18pt;">
B.<span style="font-size: 7pt;"> </span>Bread & butter clients, consistent orders, no price haggling, pays no later than 45 days,<o:p></o:p></div>
<div class="MsoListParagraphCxSpMiddle" style="margin-left: 108pt; text-align: justify; text-indent: -18pt;">
C.<span style="font-size: 7pt;"> </span>Complains about everything, many warranty issues, stretch payables for a long time, takes unauthorized discounts. Customer you wish you hadn't met.<o:p></o:p></div>
<div class="MsoListParagraphCxSpMiddle" style="margin-left: 108pt; text-align: justify; text-indent: -18pt;">
D.<span style="font-size: 7pt;"> </span>Dead. These are customers purchased from you once and you haven’t heard from in a long time.<o:p></o:p></div>
<div class="MsoListParagraphCxSpMiddle" style="margin-left: 108pt; text-align: justify;">
<br /></div>
<span style="font-size: 7pt; text-indent: -18pt;"> </span><span style="text-indent: -18pt;"><b>Start the Collection Process Early</b></span><span style="text-indent: -18pt;"> - Sometimes all it takes is an automated email reminder, or a copy of a statement, that can get the job done. This is the first step in helping to classify/segment your customer base. When the early reminder doesn't elicit a response, these are the customers that may require personal contact. Always make contact with these customers no longer than the mid-point of your first past due period. For example if your terms are 30 days- make sure you personally contact your customer at day 45. Studies indicate that personal contact at this stage of delinquency can reduce that number of customers reaching 60 days, by as much as 85%.</span><br />
<span style="text-indent: -18pt;"><br /></span>
<div class="MsoListParagraphCxSpMiddle" style="text-align: justify; text-indent: -18pt;">
<o:p></o:p></div>
<div class="MsoListParagraphCxSpMiddle" style="text-align: justify; text-indent: -18pt;">
<b>Follow-Up</b> – If your receivable still remains unpaid by this point, and there’s no diligent follow-up, then you have effectively given your blessing to be paid sometime after 60 days. Talk to the right person at your customer’s office who can sign a check. Get a firm commitment as to a date when the funds will be received. Confirm your understanding of the arrangement while you have your customer on the phone and again via email right after you hang up.<o:p></o:p></div>
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<br /></div>
<div class="MsoListParagraphCxSpMiddle" style="text-align: justify; text-indent: -18pt;">
<b>Pull The Trigger</b><u> </u>– if by 120 days you still have not received payment- it’s time to take further action. This is the point where most customer-service oriented creditors blink as this step can be uncomfortable. <span style="text-indent: -18pt;">If an individual runs out of money – you can still collect from them when they get back to work. </span></div>
<div class="MsoListParagraphCxSpMiddle" style="text-align: justify; text-indent: -18pt;">
<b><br /></b></div>
<div class="MsoListParagraphCxSpMiddle" style="text-align: center; text-indent: -18pt;">
<b> If a company runs out of money – <u>it’s dead.</u></b><o:p></o:p></div>
<div class="MsoListParagraphCxSpLast" style="text-align: justify;">
<br /></div>
<div class="MsoNormal" style="text-align: justify;">
At this point we recommend a Ten Day Demand letter be sent advising the customer that unless fall payment is received by a specific date, their account will be placed for collection.<o:p></o:p></div>
<div class="MsoNormal" style="text-align: justify;">
<br /></div>
<div class="MsoNormal" style="text-align: justify;">
To make the decision to take action easier for creditors, the Third-Party Collection industry has developed a Ten Day Demand letter which creditors can use free of charge. It works like this:<o:p></o:p></div>
<div class="MsoNormal" style="text-align: justify;">
<br /></div>
<div class="MsoListParagraphCxSpFirst" style="margin-left: 110.7pt; text-align: justify; text-indent: -18pt;">
<span style="font-family: Symbol;">·<span style="font-family: 'Times New Roman'; font-size: 7pt;"> </span></span>Letter sent to customer on collection agency letterhead giving the debtor ten business days to remit full payment directly to the creditor.<o:p></o:p></div>
<div class="MsoListParagraphCxSpMiddle" style="margin-left: 110.7pt; text-align: justify; text-indent: -18pt;">
<span style="font-family: Symbol;">·<span style="font-family: 'Times New Roman'; font-size: 7pt;"> </span></span>If the debtor pays the bill within the ten day period, there is no charge to the creditor.<o:p></o:p></div>
<div class="MsoListParagraphCxSpLast" style="margin-left: 110.7pt; text-align: justify; text-indent: -18pt;">
<span style="font-family: Symbol;">·<span style="font-family: 'Times New Roman'; font-size: 7pt;"> </span></span>Should the debtor pay only a portion of the bill or nothing at all, then their account rolls into the regular collection process of the collection agency. Funds paid after this date will be subject to your pre-determined fee agreement.<o:p></o:p></div>
<div class="MsoListParagraphCxSpLast" style="margin-left: 110.7pt; text-align: justify; text-indent: -18pt;">
<br /></div>
<div class="MsoNormal" style="text-align: justify;">
All creditors, who use this service, like the certainty that they made the right decision at the right time. If the customer fails to remit – then it was the right time to hire a third party.<o:p></o:p></div>
<br />
<o:p></o:p><br />
<div class="MsoNormal" style="text-align: justify;">
To learn more about our Ten Day Demand System, <b><a href="https://accountadjustment.us/contact-info.php" target="_blank">CLICK HERE</a></b> and fill out the form. </div>
Anonymoushttp://www.blogger.com/profile/02140491243552099959noreply@blogger.com0tag:blogger.com,1999:blog-6540704896423400217.post-36502953520125433442014-01-13T11:34:00.002-08:002014-01-13T11:34:45.795-08:00Credit Literacy for a Young Person You Love<div class="MsoNormal">
<span style="font-family: 'Times New Roman', serif; font-size: 12pt; line-height: 115%;">Generally our focus is on commercial debt and
commercial transactions; however in this issue we will be discussing credit and
financial literacy for high school students.</span><span style="font-family: 'Times New Roman', serif; font-size: 12pt; line-height: 115%;">
</span><span style="font-family: 'Times New Roman', serif; font-size: 12pt; line-height: 115%;">Take this home and have a discussion with your own children or someone
you care about.</span></div>
<div class="MsoNormal">
<span style="font-family: 'Times New Roman', serif; font-size: 12pt; line-height: 115%;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; line-height: 115%;">Some of our community involvement activities centre
on personal credit issues. We provide a credit seminar to local high schools.
It is part of the Career and Life Management program (CALM). There is only a paragraph dedicated to credit
and its use in the textbooks. As older consumers will attest, there is much
more to be learned about the subject and it would be great if it didn’t have to
be learned the hard way!<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; line-height: 115%;">Here is the seminar outline that we use:<o:p></o:p></span></div>
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<span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; line-height: 115%;"><br /></span></div>
<div class="MsoNormal" style="margin-left: 36.0pt;">
<i><span style="font-family: "Times New Roman","serif"; font-size: 10.0pt; line-height: 115%;">Credit
is defined as: confidence in a purchasers ability and intention to pay,
displayed by entrusting the buyer with goods or services without immediate
payment.<o:p></o:p></span></i></div>
<div class="MsoNormal" style="margin-left: 36.0pt;">
<i><span style="font-family: "Times New Roman","serif"; font-size: 10.0pt; line-height: 115%;"><br /></span></i></div>
<div class="MsoNormal" style="margin-left: 36.0pt;">
<i><span style="font-family: "Times New Roman","serif"; font-size: 10.0pt; line-height: 115%;">Examples
of credit: cell phones, gym memberships, library cards, student loans, Visa,
MasterCard, store credit cards, utilities.<o:p></o:p></span></i></div>
<div class="MsoNormal" style="margin-left: 36.0pt;">
<i><span style="font-family: "Times New Roman","serif"; font-size: 10.0pt; line-height: 115%;"><br /></span></i></div>
<div class="MsoNormal" style="margin-left: 36.0pt;">
<i><span style="font-family: "Times New Roman","serif"; font-size: 10.0pt; line-height: 115%;">How
do you get credit? 1) Capacity – Cash Flow (job)<o:p></o:p></span></i></div>
<div class="MsoNormal" style="margin-left: 36.0pt;">
<i><span style="font-family: "Times New Roman","serif"; font-size: 10.0pt; line-height: 115%;">
2) Character – Attitude <o:p></o:p></span></i></div>
<div class="MsoNormal" style="margin-left: 36.0pt;">
<i><span style="font-family: "Times New Roman","serif"; font-size: 10.0pt; line-height: 115%;">
3) Credit worthiness – Payment habits<o:p></o:p></span></i></div>
<div class="MsoNormal" style="margin-left: 36.0pt;">
<i><span style="font-family: "Times New Roman","serif"; font-size: 10.0pt; line-height: 115%;">
4) Conditions – Layoffs (bad economy)<o:p></o:p></span></i></div>
<div class="MsoNormal" style="margin-left: 36.0pt;">
<i><span style="font-family: "Times New Roman","serif"; font-size: 10.0pt; line-height: 115%;"><br /></span></i></div>
<div class="MsoNormal" style="margin-left: 36.0pt;">
<i><span style="font-family: "Times New Roman","serif"; font-size: 10.0pt; line-height: 115%;">Cost
of Credit: <o:p></o:p></span></i></div>
<div class="MsoNormal" style="margin-left: 36.0pt;">
<i><span style="font-family: "Times New Roman","serif"; font-size: 10.0pt; line-height: 115%;"><br /></span></i></div>
<div class="MsoNormal" style="margin-left: 36.0pt;">
<i><span style="font-family: "Times New Roman","serif"; font-size: 10.0pt; line-height: 115%;">Examples
of common credit issues: roommates, cellphone bill, gym membership<o:p></o:p></span></i></div>
<div class="MsoNormal" style="margin-left: 36.0pt;">
<i><span style="font-family: "Times New Roman","serif"; font-size: 10.0pt; line-height: 115%;"><br /></span></i></div>
<div class="MsoNormal" style="margin-left: 36.0pt;">
<i><span style="font-family: "Times New Roman","serif"; font-size: 10.0pt; line-height: 115%;">How
long do I have to fix the problem? Generally 90 days to pay all arrears.<o:p></o:p></span></i></div>
<div class="MsoNormal" style="margin-left: 36.0pt;">
<i><span style="font-family: "Times New Roman","serif"; font-size: 10.0pt; line-height: 115%;"><br /></span></i></div>
<div class="MsoNormal" style="margin-left: 36.0pt;">
<i><span style="font-family: "Times New Roman","serif"; font-size: 10.0pt; line-height: 115%;">Collection
Agencies – What happens if I don’t pay?<o:p></o:p></span></i></div>
<div class="MsoNormal" style="margin-left: 36.0pt;">
<i><span style="font-family: "Times New Roman","serif"; font-size: 10.0pt; line-height: 115%;"><br /></span></i></div>
<div class="MsoNormal" style="margin-left: 36.0pt;">
<i><span style="font-family: "Times New Roman","serif"; font-size: 10.0pt; line-height: 115%;">Bankruptcy
– A Credit “Mulligan”<o:p></o:p></span></i></div>
<div class="MsoNormal" style="margin-left: 36.0pt;">
<i><span style="font-family: "Times New Roman","serif"; font-size: 10.0pt; line-height: 115%;"><br /></span></i></div>
<div class="MsoNormal" style="margin-left: 36.0pt;">
<i><span style="font-family: "Times New Roman","serif"; font-size: 10.0pt; line-height: 115%;">Budgeting
- Importance<o:p></o:p></span></i></div>
<div class="MsoNormal" style="margin-left: 36.0pt;">
<i><span style="font-family: "Times New Roman","serif"; font-size: 10.0pt; line-height: 115%;"><br /></span></i></div>
<div class="MsoNormal" style="margin-left: 36.0pt;">
<i><span style="font-family: "Times New Roman","serif"; font-size: 10.0pt; line-height: 115%;">Q
& A<o:p></o:p></span></i></div>
<div class="MsoNormal" style="margin-left: 36.0pt;">
<i><span style="font-family: "Times New Roman","serif"; font-size: 10.0pt; line-height: 115%;"><br /></span></i></div>
<span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; line-height: 115%; mso-ansi-language: EN-CA; mso-bidi-language: AR-SA; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin;">It has been our experience
that gym memberships, cell phones, and roommates are the most common reasons a
young person will have credit troubles. Have this conversation with the young
person and explain to them the responsible use of credit and how it will either
help or hinder them in the not too distant future. A great credit rating opens
up many possibilities whereas a poor one can hold you back for a long time</span>Anonymoushttp://www.blogger.com/profile/02140491243552099959noreply@blogger.com0tag:blogger.com,1999:blog-6540704896423400217.post-2434337109641334072014-01-10T14:44:00.004-08:002014-01-10T14:44:47.883-08:00Priority Credit Recovery Inc. and Account Adjustment Bureau save US Producer with Innovative Solution.<div class="MsoNormal">
<br /></div>
<div class="MsoNormal" style="text-align: justify;">
PCR received a collection account
from one of their Multi-National Canadian clients for over $100K against a USA
Producer. PCR engaged their USA
subsidiary Account Adjustment Bureau. The documentation consisted only of
invoices, a name and number. <o:p></o:p></div>
<div class="MsoNormal" style="text-align: justify;">
<br /></div>
<div class="MsoNormal" style="text-align: justify;">
An investigation was conducted; the
debtor was contacted who admitted to receiving and selling the product. There
was no dispute. They cited poor financial planning and cost overruns as the
cause for non-payment. They could not pay and legal action appeared to be the
only recourse. It was clear to PCR/AAB the debtor needed to restructure,
increase profitability by lowering production costs, plus they needed better
equipment. <o:p></o:p></div>
<div class="MsoNormal" style="text-align: justify;">
<br /></div>
<div class="MsoNormal" style="text-align: justify;">
A solution was proposed by
PCR/AAB and accepted by the client and debtor. PCR/ AAB drafted a loan
agreement, incorporated Personal and Corporate Guarantees, interest and a fee
structure for the service. The debtor converted the payable to a term loan,
which enabled them restructure, obtain capital financing, increase
profitability and expand their market share. The client converted the
receivable to an investment asset and continues to do business on a COD basis. <o:p></o:p></div>
<div class="MsoNormal" style="text-align: justify;">
<br /></div>
<br />
<div class="MsoNormal" style="text-align: justify;">
The supplier and producer
continue to have a mutually profitable relationship. USA/Canadian International
Relations improved with this innovative solution proposed by highly trained
professionals who went outside the box. </div>
<div class="MsoNormal" style="text-align: justify;">
<br /></div>
<div class="MsoNormal" style="text-align: justify;">
This example is proof that PCR/AAB
professionals look beyond the obvious when collecting a debt. <o:p></o:p></div>
Anonymoushttp://www.blogger.com/profile/02140491243552099959noreply@blogger.com0tag:blogger.com,1999:blog-6540704896423400217.post-43398380165845456502013-11-09T11:34:00.000-08:002013-11-09T11:34:06.589-08:00A Credit R.I.P. – It’s Not What You Think It Is…<!--[if gte mso 9]><xml>
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<div class="MsoNormal">
<span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; line-height: 115%;">Here’s a simply strategy to clean up those year-end
slow-payers before the holidays.</span></div>
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<br /></div>
<div class="MsoNormal">
<span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; line-height: 115%;">In this issue we will discuss the costs and benefits
of having a solid plan of attack for your slow-paying accounts.</span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; line-height: 115%;">Cash flow is the lifeblood of any business. Without
it your company will have a financial heart attack. Therefore it makes good
sense to have a consistent strategy for collecting your receivables. And while
large businesses generally have a consistent approach when managing their
receivables, many small and medium sized businesses do not.</span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; line-height: 115%;">The owners of small and medium sized business are
usually pretty close to their customers. This can be both good and bad. Good if
the relationship is respected bad if your “friend” uses it to take advantage of
you.</span></div>
<div class="MsoNormal">
<br /></div>
<b>
</b><div align="center" class="MsoNormal" style="text-align: center;">
<b><span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; line-height: 115%;">So
What’s a R.I.P?</span></b></div>
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<span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; line-height: 115%;">A R.I.P. is defined by Brad Hams of the book
“Ownership Thinking” as a Rapid Improvement Plan for the financial health of
your business. He calls missed opportunities “cracks in the table” where your
profits can fall. A R.I.P. is an initiative that you and your staff can
implement easily to improve your business right now as well as creating a fun
activity in which all of your staff can participate. An example of a year-end receivable clean up R.I.P.
might look like this:</span></div>
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<b><span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; line-height: 115%;">ACTIONS:</span></b></div>
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<span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; line-height: 115%; mso-fareast-font-family: "Times New Roman";"><span style="mso-list: Ignore;">1.<span style="font: 7.0pt "Times New Roman";"> </span></span></span><span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; line-height: 115%;">Produce
clear, accurate, and timely invoices</span></div>
<div class="MsoListParagraphCxSpMiddle" style="mso-list: l0 level1 lfo1; text-indent: -18.0pt;">
<span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; line-height: 115%; mso-fareast-font-family: "Times New Roman";"><span style="mso-list: Ignore;">2.<span style="font: 7.0pt "Times New Roman";"> </span></span></span><span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; line-height: 115%;">Ask
for deposits and/or progress payments</span></div>
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<span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; line-height: 115%; mso-fareast-font-family: "Times New Roman";"><span style="mso-list: Ignore;">3.<span style="font: 7.0pt "Times New Roman";"> </span></span></span><span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; line-height: 115%;">Implement
a seven day customer service call (seven days after performing your work and
invoicing the job, your customer service dept. will call the client and ensure
they are happy with your work and inquire if there are concerns about the
invoice) This is looked upon by your customer as a pro-active service call, yet
provides you with the ability to discover or eliminate potential excuses for
non-payment of the invoice.</span></div>
<div class="MsoListParagraphCxSpMiddle" style="mso-list: l0 level1 lfo1; text-indent: -18.0pt;">
<span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; line-height: 115%; mso-fareast-font-family: "Times New Roman";"><span style="mso-list: Ignore;">4.<span style="font: 7.0pt "Times New Roman";"> </span></span></span><span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; line-height: 115%;">Complete
credit approvals BEFORE the order is processed</span></div>
<div class="MsoListParagraphCxSpMiddle" style="mso-list: l0 level1 lfo1; text-indent: -18.0pt;">
<span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; line-height: 115%; mso-fareast-font-family: "Times New Roman";"><span style="mso-list: Ignore;">5.<span style="font: 7.0pt "Times New Roman";"> </span></span></span><span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; line-height: 115%;">Create
and send (by email) monthly statements to customers</span></div>
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<span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; line-height: 115%; mso-fareast-font-family: "Times New Roman";"><span style="mso-list: Ignore;">6.<span style="font: 7.0pt "Times New Roman";"> </span></span></span><span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; line-height: 115%;">Have
the sales team keep track of past due invoices and report on these at a weekly
management huddle, after which the next action would be determined.</span></div>
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<span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; line-height: 115%; mso-fareast-font-family: "Times New Roman";"><span style="mso-list: Ignore;">7.<span style="font: 7.0pt "Times New Roman";"> </span></span></span><span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; line-height: 115%;">Customers
that are past due 91 days and longer to be sent to a professional collector
with the view to collecting the funds and retaining the customer.</span></div>
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<b><span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; line-height: 115%;">Key
Concepts</span></b></div>
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<span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; line-height: 115%; mso-fareast-font-family: "Times New Roman";"><span style="mso-list: Ignore;">a)<span style="font: 7.0pt "Times New Roman";"> </span></span></span><span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; line-height: 115%;">A
R.I.P is a tool to engage all employees in improving the performance of one Key
Performance Indicator at a time.</span></div>
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<span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; line-height: 115%; mso-fareast-font-family: "Times New Roman";"><span style="mso-list: Ignore;">b)<span style="font: 7.0pt "Times New Roman";"> </span></span></span><span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; line-height: 115%;">R.I.P’s
shouldn’t be difficult to design and can be created in just a few hours</span></div>
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<span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; line-height: 115%; mso-fareast-font-family: "Times New Roman";"><span style="mso-list: Ignore;">c)<span style="font: 7.0pt "Times New Roman";"> </span></span></span><span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; line-height: 115%;">Non-management
people should be involved in the design of a R.I.P.</span></div>
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<span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; line-height: 115%; mso-fareast-font-family: "Times New Roman";"><span style="mso-list: Ignore;">d)<span style="font: 7.0pt "Times New Roman";"> </span></span></span><span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; line-height: 115%;">Your
organization should have at least one R.I.P in process at all times</span></div>
<span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; line-height: 115%; mso-ansi-language: EN-CA; mso-bidi-language: AR-SA; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin;">According to the
author of <i style="mso-bidi-font-style: normal;">Ownership Thinking, </i>Brad
Hams, R.I.P’s are powerful tools for a number of reasons aside from profit
enhancement. They also identify process improvements</span>Anonymoushttp://www.blogger.com/profile/02140491243552099959noreply@blogger.com0tag:blogger.com,1999:blog-6540704896423400217.post-87041567002214975002013-10-25T09:54:00.001-07:002013-10-25T09:54:40.366-07:00The Non-Payment Trifecta<!--[if gte mso 9]><xml>
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<div class="MsoNoSpacing">
<span style="mso-ansi-language: EN-CA;"></span></div>
<div class="MsoNoSpacing">
<span style="mso-ansi-language: EN-CA;">Over the 29 years
I’ve spent in the accounts receivable management industry, the vast majority of
reasons a creditor experiences a slow-paying customer boils down to one of
three issues: They are:</span></div>
<div class="MsoNoSpacing">
<br /></div>
<h3 class="MsoNoSpacing" style="margin-left: 36.0pt; mso-list: l0 level1 lfo1; text-indent: -18.0pt;">
<b style="mso-bidi-font-weight: normal;"><span style="mso-ansi-language: EN-CA; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"><span style="mso-list: Ignore;">1.<span style="font: 7.0pt "Times New Roman";">
</span></span></span></b><b style="mso-bidi-font-weight: normal;"><span style="mso-ansi-language: EN-CA;">Sticker Shock/Dispute</span></b></h3>
<div class="MsoNoSpacing" style="margin-left: 36.0pt;">
<span style="mso-ansi-language: EN-CA;">Take for example an I.T. company that is contracted to install a new
software application. Only after the installation does the software company
realize that the customers network is not configured correctly, requiring the
customer to either abandon the purchase or upgrade some hardware. Either
decision will cost the customer money they hadn’t expected. The same scenario
plays out all over North America each day and affects every industry. Therefore
it is absolutely vital that creditors work very hard to manage expectations
early in the relationship.</span></div>
<div class="MsoNoSpacing" style="margin-left: 36.0pt;">
<br /></div>
<h3 class="MsoNoSpacing" style="margin-left: 36.0pt; mso-list: l0 level1 lfo1; text-indent: -18.0pt;">
<b style="mso-bidi-font-weight: normal;"><span style="mso-ansi-language: EN-CA; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"><span style="mso-list: Ignore;">2.<span style="font: 7.0pt "Times New Roman";">
</span></span></span></b><b style="mso-bidi-font-weight: normal;"><span style="mso-ansi-language: EN-CA;">Invoice Inconsistencies</span></b></h3>
<div class="MsoNoSpacing" style="margin-left: 36.0pt;">
<span style="mso-ansi-language: EN-CA;">Many large customers are now automating their accounts payable systems
to save themselves money through the outsourcing of this back office function.
These automated systems are all different requiring suppliers to become subject
matter experts on their customer’s payable systems! If your invoice isn’t coded
correctly or doesn’t contain certain signatures or purchase order numbers, the
customer doesn’t call you to ask for help. They simply leave you to figure that
out for yourself. This process causes payment delays to your invoice. And once
your invoice is received correctly then the customer takes another 30 days to
pay.</span></div>
<div class="MsoNoSpacing" style="margin-left: 36.0pt;">
<br /></div>
<h3 class="MsoNoSpacing" style="margin-left: 36.0pt; mso-list: l0 level1 lfo1; text-indent: -18.0pt;">
<b style="mso-bidi-font-weight: normal;"><span style="mso-ansi-language: EN-CA; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"><span style="mso-list: Ignore;">3.<span style="font: 7.0pt "Times New Roman";">
</span></span></span></b><b style="mso-bidi-font-weight: normal;"><span style="mso-ansi-language: EN-CA;">Simple Pressure Required</span></b></h3>
<div class="MsoNoSpacing" style="margin-left: 36.0pt;">
<span style="mso-ansi-language: EN-CA;">The third involves a customer who is initially delaying paying your
invoice due to a cash flow problem. This customer knows that trade credit is
much easier to get than bank credit, so he uses his suppliers as his bank.
Often a polite but firm telephone call is all that is required to receive your
payment; however this customer’s financial situation may be more precarious
than even he anticipates. In this case the creditor who acts first – gets paid
and those who wait – don’t.</span></div>
<div class="MsoNoSpacing">
<br /></div>
<div class="MsoNoSpacing">
<span style="mso-ansi-language: EN-CA;">More and more
companies are embracing the idea of outsourcing their credit and accounts
receivable management functions rather than maintaining staff, lease space,
technology, and training on their own. Should you consider outsourcing your
credit and accounts receivable functions – it is vital that your provider
clearly understands the above-noted concepts and can skillfully navigate their
way to obtaining payment and serving your customer or help you to quickly
identify a problem customer and guide you to consider the appropriate actions
before it is too late.</span></div>
<div class="MsoNoSpacing">
<br /></div>
<div class="MsoNoSpacing">
<i style="mso-bidi-font-style: normal;"><span style="mso-ansi-language: EN-CA;">About The Author: Brad Lohner is a 29 year
veteran in the accounts receivable management industry in North America. He
owns Credit Process Advisors, a credit and collections consulting company, as
well as two commercial debt collection agencies in the USA and Canada, along with
Lien-Pro® Canada’s only construction lien filing firm.</span></i></div>
Anonymoushttp://www.blogger.com/profile/02140491243552099959noreply@blogger.com0tag:blogger.com,1999:blog-6540704896423400217.post-56125716002888632362013-10-19T13:10:00.005-07:002013-10-20T18:46:54.331-07:00The Disturbing Surprise in Canada for U.S. Creditors<div class="MsoNormal">
With the economic climate here in the U.S.,
many companies have expanded to Canada and now carry Canadian receivables. Like
the U.S. states, different provinces and territories have different time limits
on when a creditor may sue.</div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span lang="EN-US">We received an email regarding a disturbing
trend from our Canadian agent and if you have receivables in Canada, it is
worth a read. We have taken excerpts from the email and edited where
applicable.<o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span lang="EN-US"><b>The Disturbing
Trend</b><o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span lang="EN-US">Being one of the largest commercial
collection agency operations in Canada, we receive a LOT of large balance
commercial accounts forwarded to us from U.S. collection agencies and
miscellaneous U.S. Clients. Recently,
one of our seasoned collectors drew our attention to a disturbing trend that
keeps resurfacing and is surprising U.S. creditors.<o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span lang="EN-US">He showed us two large balance commercial
accounts against limited debtor companies in the provinces of Ontario and
British Columbia. In both cases our
instructions were to secure immediate payment or sue. Both accounts were two
and a half years old and the Client was frustrated with the stalling. After a
bit of research and a few phone calls it was determined that both debtor
companies were out of business. However, the Client had personal guarantees on
both accounts.<o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span lang="EN-US">When confronted with their personal
guarantees, it became obvious that all the guarantors on both accounts had
absolutely no intention of paying voluntarily. Research indicated that the
guarantors easily had the personal assets and funds to pay. Like the U.S.,
commercial debtors know the legal system more than retail debtors and are quick
to exploit a loophole.<o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span lang="EN-US">Here in Canada, legal costs are far lower
up here than in the US. Also, there are far fewer legal stall mechanisms for
debtors. In addition, there are some fantastic legal tools available in Canada.<o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span lang="EN-US"><b>The Surprise</b><o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span lang="EN-US">The last payment on the Ontario account was
just over 2 years prior. However, the province of Ontario has a 2 year limit on
commencing legal action. Our Client was stunned. What this means, is you can report the debt
to a credit bureau, which will stay on the debtor’s credit report for 6 years.
BUT, if you haven’t commenced legal action within 2 years from the date of last
payment then you no longer have any legal recourse. The debtors stalled the
Client past the 2 year limit and without litigation, they would never pay. <o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span lang="EN-US">Fortunately for our Client, the British
Columbia account didn’t have the same problem as Ontario. A British Columbia 2
year limit for legal action became effective on June 1, 2013. Debts incurred
after June 1 are subject to the 2 year limit. However, the Client account was
grandfathered or prior to June 1, so the statute of limitations was still 6
years.<o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span lang="EN-US"><b>The Good and the Bad</b><o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span lang="EN-US">The Ontario account was a write off, but
the results on the British Columbia account were successful. We ended up
recovering our Client’s receivable, after we pre-garnisheed half the balance
from the guarantor’s bank accounts and the guarantors decided to pay in full.
Like I mentioned above, Canada has some very effective legal maneuvers when you
know what you are doing.<o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span lang="EN-US">Legal action is sometimes the best option
in the case of large balance commercial accounts. However, the decision to sue
must be made prior to the limits on commencing debt litigation set by the
province the debtor is located in. <o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span lang="EN-US">When it comes to debt in Canada, the
province or territory where a debtor is located in determines the time period or
time limit for commencing legal action. It must also be kept in mind should a
guarantor live in a different province then a different time limit may
apply. <o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span lang="EN-US"><b>The Clock is Ticking</b><o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span lang="EN-US">The best advice we can give your Clients is
to be aware of provincial limitations. As a courtesy, we have included a map of
the debt litigation limits across Canada. You may want to distribute this
reference map to your Clients with Canadian portfolios.</span></div>
<div class="MsoNormal">
<br />
<a href="http://www.accountadjustment.us/images/Limitations%20on%20Debt%20Civil%20Litigation%20across%20Canada.pdf"><img border="0" height="455" src="http://www.accountadjustment.us/images/mini_map.gif" width="600" /></a>
<br />
<a href="http://www.accountadjustment.us/images/Limitations%20on%20Debt%20Civil%20Litigation%20across%20Canada.pdf" target="_blank">Download this Map as a PDF</a>.<br />
<br /></div>
<div class="MsoNormal">
Beware of the stall game. While a creditor
may not know the time limits, the odds are the debtor sure does. In the case of
the Ontario account mentioned above, the guarantors used every stall tactic
until they knew the creditor couldn’t sue.</div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span lang="EN-US">Creditors must be careful when dealing with
the statute of limitations regarding debts at the Federal (6 Years) or
Provincial Government level. These exceptions include student loans, child
support, taxes and alimony. Should you have any questions please let us know. <o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<br />
<div class="MsoNormal">
<span lang="EN-US">We would like to thank PCR for their email,
as this information is sure to save a lot of money for some of our Clients.<o:p></o:p></span></div>
Anonymoushttp://www.blogger.com/profile/02140491243552099959noreply@blogger.com0